SEC News Digest

Issue 2012-141 July 23, 2012

Enforcement proceedings

SEC Charges Stock Promoter in Internet-Based Scalping Scheme

The Securities and Exchange Commission announced today that on July 20, 2012, it filed a civil fraud action against former Connecticut resident Jerry S. Williams, a stock promoter, and two companies that he controlled, Monk’s Den, LLC and First In Awareness, LLC. The Commission charged Williams with running a scalping scheme from which he made over $2.4 million. Scalping is a type of fraud in which the owner of shares of a security recommends that security for investment and then immediately sells it at a profit upon the rise in market price which follows the recommendation.

The Commission’s Complaint alleges that from at least early 2009 through at least the end of 2010, Williams recommended two stocks, Cascadia Investments, Inc. and Green Oasis Environmental, Inc., to a large group of potential investors who followed his trading recommendations and strategies. According to the Complaint, Williams, who was known to his followers as “Monk,” used his internet-based message board (called “Monk’s Den”), in-person seminars (called “Monkinars”), and other means to encourage people to buy, hold, and accumulate Cascadia and Green Oasis stock. The Complaint alleges that in fact, unknown to potential investors, Williams had been hired by Cascadia and Green Oasis to promote their stock and had been compensated with millions of free and discounted shares of these stocks. According to the Complaint, Williams secretly sold millions of Cascadia and Green Oasis shares at the same time he was encouraging potential investors to buy, hold and accumulate these stocks. Through this scheme, the Complaint alleges, Williams made over $2.4 million.

The Commission’s Complaint charged Williams, First In Awareness, LLC and Monk’s Den, LLC with violating Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a), (b), and (c) thereunder. The Commission also charged Williams with violating Sections 17(a)(1), 17(a)(2), 17(a)(3) and 17(b) of the Securities Act of 1933 and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The Commission is seeking permanent injunctions, disgorgement, prejudgment interest, and civil penalties against each defendant and, as to Williams only, a penny stock bar. [SEC v. Jerry S. Williams, Monk’s Den, LLC, and First In Awareness, LLC, 3:12-cv-01068, District of Connecticut] (LR-22420)

INVESTMENT COMPANY ACT RELEASES

P.E. Partners III, LLC, et al.

A notice has been issued giving interested persons until August 15, 2012 to request a hearing on an application filed by P.E. Partners III, LLC, et al. for an order to exempt certain limited liability companies formed for the benefit of eligible employees of Latham & Watkins LLP from certain provisions of the Investment Company Act of 1940 (Act). Each company will be an “employees’ securities company” within the meaning of Section 2(a)(13) of the Act. (Rel. IC-30143 – July 20)

Credit Suisse Asset Management, LLC, et al.

A notice has been issued giving interested persons until August 14, 2012, to request a hearing on an application filed by Credit Suisse Asset Management, LLC, et al. for an order under Section 12(d)(1)(J) of the Investment Company Act of 1940 (Act) for an exemption from Sections 12(d)(1)(A) and (B) of the Act, under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act, and under Section 6(c) of the Act for an exemption from Rule 12d1-2(a) under the Act. The order would (a) permit certain management investment companies registered under the Act to acquire shares of certain open-end management investment companies registered under the Act that are outside the same group of investment companies as the acquiring investment companies, and (b) permit funds of funds relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-30144 – July 20)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by NASDAQ OMX PHLX LLC to establish Managed Data Solution for PHLX Top of Options (SR-Phlx-2012-93) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67466)

A proposed rule change filed by New York Stock Exchange LLC establishing a fee for television distribution of the NYSE Trades Data Product (SR-NYSE-2012-28) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67467)

A proposed rule change filed by NASDAQ OMX PHLX LLC to amend exchange rules 1014, 1051, and OFPA F-2 (SR-Phlx-2012-92) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67469)

A proposed rule change submitted by NASDAQ OMX BX, Inc. (SR-BX-2012-051) relating to routing fees has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67474)

A proposed rule change submitted by BATS Y-Exchange, Inc. relating to a new BYX rule regarding telemarketing (SR-BYX-2012-014) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67476)

A proposed rule change submitted by BATS Exchange, Inc. relating to a new BATS rule regarding telemarketing (SR-BATS-2012-028) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67477)

Proposed Rule Change

The Chicago Board Options Exchange, Incorporated filed with the Securities and Exchange Commission a proposed rule change (SR-CBOE-2012-066) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to increase position and exercise limits for EEM options. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67478)

Approval of Proposed Rule Change

The Commission approved a proposed rule change submitted by Chicago Board Options Exchange, Incorporated (SR-CBOE-2012-042), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, to list and trade CBOE S&P 500 AM/PM Basis Options. Publication in the Federal Register is expected during the week of July 23. (Rel. 34-67482)

SECURITIES ACT REGISTRATIONS

The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue.

Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics

5.06

Change in Shell Company Status

6.01

ABS Informational and Computational Material.

6.02

Change of Servicer or Trustee.

6.03

Change in Credit Enhancement or Other External Support.

6.04

Failure to Make a Required Distribution.

6.05

Securities Act Updating Disclosure.

7.01

Regulation FD Disclosure

8.01

Other Events

9.01

Financial Statements and Exhibits

8-K reports may be viewed in person in the Commission's Public Reference Branch at 100 F Street, N.E., Washington, D.C. To obtain paper copies, please refer to information on the Commission's Web site at http://www.sec.gov/answers/publicdocs.htm. In most cases, you can view and download this information by using the search function located at http://www.sec.gov/edgar/searchedgar/companysearch.html.